CHAPTER
1
The Nature of Negotiation
Objectives
1.
2.
3.
4.
Understand the definition of negotiation, the key elements of a negotiation process,
and the distinct types of negotiation.
Explore how people use negotiation to manage different situations of
interdependence—that is, that they depend on each other for achieving their goals.
Consider how negotiation fits within the broader perspective of processes for
managing conflict.
Gain an overview of the organization of this book and the content of its chapters.
Chapter Outline
A Few Words about Our Style and Approach
Joe and Sue Carter
Characteristics of a Negotiation Situation
Interdependence
Types of Interdependence Affect Outcomes
Alternatives Shape Interdependence
Mutual Adjustment
Mutual Adjustment and Concession Making
Two Dilemmas in Mutual Adjustment
Value Claiming and Value Creation
Conflict
Definitions
Levels of Conflict
Functions and Dysfunctions of Conflict
Factors That Make Conflict Easy or Difficult to Manage
Effective Conflict Management
Overview of the Chapters in This Book
Chapter Summary
“That’s it! I’ve had it! This car is dead!” screamed Chang Yang, pounding on the steering
wheel and kicking the door shut on his 10-year-old Toysun sedan. The car had refused
to start again, and Chang was going to be late for class (again)! Chang wasn’t doing well
in that management class, and he couldn’t afford to miss any more classes. Recognizing
1
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Chapter 1 The Nature of Negotiation
that it was finally time to do something about the car, which had been having numerous
mechanical problems for the last three months, Chang decided he would trade the Toysun
in for another used car, one that would hopefully get him through graduation. After classes
that day, he got a ride to the nearby shopping area, where there were several repair garages
and used car lots. He knew almost nothing about cars, and didn’t think he needed to—all
he needed was reliable transportation to get him through the next 18 months.
A major international airline company is close to bankruptcy. The fear of terrorism,
a number of new “budget-fare” airlines, and rising costs for fuel have all put the airline
under massive economic pressure. The company seeks $800 million in wage and benefit
cuts from the pilots’ union, the third round of cuts in two years, in order to head off the
bankruptcy. Rebuffed by the chief union negotiator for the pilots, the company seeks to
go directly to the officers of the Air Line Pilots Association—the international union—to
discuss the cuts. If the pilots do not agree to concessions, it is unlikely that other unions—
flight attendants, mechanics, and so on—will agree, and bankruptcy will be inevitable.
Janet and Jocelyn are roommates. They share a one-bedroom apartment in a big city
where they are both working. Janet, an accountant, has a solid job with a good company,
but she has decided that it is time to go back to school to get her MBA. She has enrolled in
Big City University’s evening MBA program and is now taking classes. Jocelyn works for
an advertising company and is on the fast track. Her job not only requires a lot of travel,
but also requires a lot of time socializing with clients. The problem is that when Janet is
not in evening class, she needs the apartment to read and study and has to have quiet to get
her work done. However, when Jocelyn is at the apartment, she talks a lot on the phone,
brings friends home for dinner, and is either getting ready to go out for the evening or coming back in very late (and noisily!). Janet has had enough of this disruption and is about to
confront Jocelyn.
A country’s government is in a financial crisis, created by a good old-fashioned
“smackdown” between the newly re-elected president and the legislature. The president
insists that taxes must be raised to pay for ongoing government services, particularly the
taxes of the richest 1 to 2 percent of the taxpayers. In contrast, a majority of the elected legislature, whose political party favors the wealthy, insists that the president cut government
spending instead! Moreover, a group of the legislators have taken a public “pledge” to not
agree to any tax increases and fear losing their jobs in the next election if they give in on
their pledge. If the crisis is not resolved in a few days, a financial doomsday is predicted.
Ashley Johnson is one of the most qualified recruits this year from a top-25 ranked
business school. She is delighted to have secured a second interview with a major consumer goods company, which has invited her to its headquarters city and put her up in a
four-star hotel that is world-renowned for its quality facilities and service. After getting in
late the night before due to flight delays, she wakes at 6:45 a.m. to get ready for a 7:30 a.m.
breakfast meeting with the senior company recruiter. She steps in the shower, grabs the
water control knob to turn it, and the knob falls off in her hand! There is no water in the
shower at all; apparently, repairmen started a repair job on the shower, turned all the water
off somewhere, and left the job unfinished. Ashley panics at the thought of how she is going
to deal with this crisis and look good for her breakfast meeting in 45 minutes.
Do these incidents look and sound familiar? These are all examples of negotiation—
negotiations that are about to happen, are in the process of happening, or have happened
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A Few Words about Our Style and Approach
3
in the past and created consequences for the present. And they all serve as examples of the
problems, issues, and dynamics that we will address throughout this book.
People negotiate all the time. Friends negotiate to decide where to have dinner. Children
negotiate to decide which television program to watch. Businesses negotiate to purchase
materials and sell their products. Lawyers negotiate to settle legal claims before they go to
court. The police negotiate with terrorists to free hostages. Nations negotiate to open their
borders to free trade. Negotiation is not a process reserved only for the skilled diplomat,
top salesperson, or ardent advocate for an organized lobby; it is something that everyone
does, almost daily. Although the stakes are not usually as dramatic as peace accords or
large corporate mergers, everyone negotiates; sometimes people negotiate for major things
like a new job, other times for relatively minor things like who will take out the garbage.
Negotiations occur for several reasons: (1) to agree on how to share or divide a limited resource, such as land, or money, or time; (2) to create something new that neither
party could do on his or her own; or (3) to resolve a problem or dispute between the parties. Sometimes people fail to negotiate because they do not recognize that they are in a
negotiation situation. By choosing options other than negotiation, they may fail to achieve
their goals, get what they need, or manage their problems as smoothly as they might like
to. People may also recognize the need for negotiation but do poorly because they misunderstand the process and do not have good negotiating skills. After reading this book, we
hope you will be thoroughly prepared to recognize negotiation situations; understand how
negotiation works; know how to plan, implement, and complete successful negotiations;
and, most importantly, be able to maximize your results.
A Few Words about Our Style and Approach
Before we begin to dissect the complex social process known as negotiation, we need to
say several things about how we will approach this subject. First we will briefly define negotiation. Negotiation is “a form of decision making in which two or more parties talk with
one another in an effort to resolve their opposing interests” (Pruitt, 1981, p. xi). Moreover,
we will be careful about how we use terminology in this book. For most people, bargaining and negotiation mean the same thing; however, we will be quite distinctive in the
way we use the two words. We will use the term bargaining to describe the competitive,
win–lose situations such as haggling over the price of that item that happens at a yard sale,
flea market, or used car lot; we will use the term negotiation to refer to win–win situations
such as those that occur when parties are trying to find a mutually acceptable solution to a
complex conflict.
Second, many people assume that the “heart of negotiation” is the give-and-take process used to reach an agreement. While that give-and-take process is extremely important, negotiation is a very complex social process; many of the most important factors that
shape a negotiation result do not occur during the negotiation; they occur before the parties
start to negotiate, or shape the context around the negotiation. In the first few chapters of
the book, we will examine why people negotiate, the nature of negotiation as a tool for
managing conflict, and the primary give-and-take processes by which people try to reach
agreement. In the remaining chapters, we examine the many ways that differences in the
substantive issues, the people involved, the processes they follow, and the context in which
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Chapter 1 The Nature of Negotiation
negotiation occurs enrich the complexity of the dynamics of negotiation. We will return to
a more complete overview of the book at the end of this chapter.
Third, our insights into negotiation are drawn from three sources. The first is our personal experience as negotiators ourselves and the rich number of negotiations that occur
every day in our own lives and in the lives of people around the world. The second source
is the media—television, radio, newspaper, magazine, and Internet—that report on actual
negotiations every day. We will use quotes and examples from the media to highlight
key points, insights, and applications throughout the book. Finally, the third source is the
wealth of social science research that has been conducted on numerous aspects of negotiation. This research has been conducted for almost 60 years in the fields of economics,
psychology, political science, communication, labor relations, law, sociology, and anthropology. Each discipline approaches negotiation differently. Like the parable of the blind
men who are attempting to describe the elephant by touching and feeling different parts
of the animal, each social science discipline has its own theory and methods for studying
outputs of negotiation, and each tends to emphasize some parts and ignore others. Thus,
the same negotiation events and outcome may be examined simultaneously from several
different perspectives.1 When standing alone, each perspective is clear but limited; combined, we begin to understand the rich and complex dynamics of this amazing animal.
We draw from all these research traditions in our approach to negotiation. When we need
to acknowledge the authors of a major theory or set of research findings, we will use the
standard social science research process of citing their work in the text by the author’s
name and the date of publication of their work; complete references for that work can be
found in the bibliography at the end of the book. When we have multiple sources to cite,
or anecdotal side comments to make, that information will appear in an endnote at the end
of each chapter.
We began this chapter with several examples of negotiations—future, present, and
past. To further develop the reader’s understanding of the foundations of negotiation, we
will develop a story about a husband and wife—Joe and Sue Carter—and a not-so-atypical
day in their lives. In this day, they face the challenges of many major and minor negotiations. We will then use that story to highlight three important themes:
1.
2.
3.
The definition of negotiation and the basic characteristics of negotiation situations.
An understanding of interdependence, the relationship between people and groups
that most often leads them to need to negotiate.
The definition and exploration of the dynamics of conflict and conflict management
processes, which will serve as a backdrop for different ways that people approach
and manage negotiations.
Joe and Sue Carter
The day started early, as usual. Over breakfast, Sue Carter raised the question of where
she and her husband, Joe, would go for their summer vacation. She wanted to sign up for
a tour of Southeast Asia being sponsored by her college’s alumni association. However,
two weeks on a guided tour with a lot of other people he barely knew was not what Joe
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Joe and Sue Carter
5
had in mind. He needed to get away from people, crowds, and schedules, and he wanted to
charter a sailboat and cruise the New England coast. The Carters had not argued (yet), but
it was clear they had a real problem here. Some of their friends handled problems like this
by taking separate vacations. With both of them working full-time, though, Joe and Sue did
agree that they would take their vacation together.
Moreover, they were still not sure whether their teenage children—Tracy and Ted—would
go with them. Tracy really wanted to go to a gymnastics camp, and Ted wanted to stay
home and do yard work in the neighborhood so he could get in shape for the football team
and buy a motor scooter with his earnings. Joe and Sue couldn’t afford summer camp and a
major vacation, let alone deal with the problem of who would keep an eye on the children
while they were away. And Sue was already “on the record” as being opposed to the motor
scooter, for obvious safety reasons.
As Joe drove to work, he thought about the vacation problem. What bothered Joe
most was that there did not seem to be a good way to manage the conflict productively.
With some family conflicts, they could compromise but, given what each wanted this time,
a simple compromise didn’t seem obvious. At other times they would flip a coin or take
turns—that might work for choosing a restaurant (Joe and Ted like steak houses, Sue and
Tracy prefer Chinese), but it seemed unwise in this case because of how much money was
involved and how important vacation time was to them. In addition, flipping a coin might
make someone feel like a loser, an argument could start, and in the end nobody would really feel satisfied.
Walking through the parking lot, Joe met his company’s purchasing manager,
Ed Laine. Joe was the head of the engineering design group for MicroWatt, a manufacturer
of small electric motors. Ed reminded Joe that they had to settle a problem created by
the engineers in Joe’s department: the engineers were contacting vendors directly rather
than going through MicroWatt’s purchasing department. Joe knew that purchasing wanted
all contacts with a vendor to go through them, but he also knew that his engineers badly
needed technical information for design purposes and that waiting for the information to
come through the purchasing department slowed things considerably. Ed Laine was aware
of Joe’s views about this problem, and Joe thought the two of them could probably find
some way to resolve it if they really sat down to work on it. Joe and Ed were also both
aware that upper management expected middle managers to settle differences among themselves; if this problem “went upstairs” to senior management, it would make both of them
look bad.
Shortly after reaching his desk, Joe received a telephone call from an automobile salesman with whom he had been talking about a new car. The salesman asked whether Sue
wanted to test-drive it. Joe wasn’t quite sure that Sue would go along with his choice; Joe
had picked out a sporty luxury import, and he expected Sue to say it was too expensive and
not very fuel efficient. Joe was pleased with the latest offer the salesman had made on the
price but thought he might still get a few more concessions out of him, so he introduced
Sue’s likely reluctance about the purchase, hoping that the resistance would put pressure
on the salesman to lower the price and make the deal “unbeatable.”
As soon as Joe hung up the phone, it rang again. It was Sue, calling to vent her
frustration to Joe over some of the procedures at the local bank where she worked as a
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6
Chapter 1 The Nature of Negotiation
senior loan officer. Sue was frustrated working for an old “family-run” bank that was not
very automated, heavily bureaucratic, and slow to respond to customer needs. Competitor banks were approving certain types of loans within three hours while Sue’s bank still
took a week. Sue had just lost landing two big new loans because of the bank’s slowness and bureaucratic procedures—and the loss of the salary bonus that landing a big
loan would bring. But whenever she tried to discuss the situation with the bank’s senior
management, she was met with resistance and a lecture on the importance of the bank’s
“traditional values.”
Most of Joe’s afternoon was taken up by the annual MicroWatt budget planning
meeting. Joe hated these meetings. The people from the finance department came in and
arbitrarily cut everyone’s figures by 30 percent, and then all the managers had to argue
endlessly to try to get some of their new-project money reinstated. Joe had learned to
work with a lot of people, some of whom he did not like very much, but these people from
finance were the most arrogant and arbitrary number crunchers imaginable. He could not
understand why the top brass did not see how much harm these people were doing to the
engineering group’s research and development efforts. Joe considered himself a reasonable
guy, but the way these people acted made him feel like he had to draw the line and fight it
out for as long as it took.
In the evening, Sue and Joe attended a meeting of their town’s Conservation Commission, which, among other things, was charged with protecting the town’s streams, wetlands,
and nature preserves. Sue is a member of the Conservation Commission, and Sue and Joe
both strongly believe in sound environmental protection and management. This evening’s
case involved a request by a real estate development firm to drain a swampy area and move
a small creek into an underground pipe in order to build a new regional shopping mall. All
projections showed that the new shopping mall would attract jobs and revenue to the area
and considerably increase the town’s tax treasury. The new mall would keep more business
in the community and discourage people from driving 15 miles to the current mall, but
opponents—a coalition of local conservationists and businessmen—were concerned that
the new mall would significantly hurt the downtown business district and do major harm to
the natural wetland and its wildlife. The debate raged for three hours, and finally, the commission agreed to continue the hearings the following week.
As Joe and Sue drove home from the council meeting, they discussed the things
they had been involved in that day. Each privately reflected that life is kind of strange—
sometimes things go very smoothly and other times things seem much too complicated.
As they went to sleep later, they each thought about how they might have approached
certain situations differently during the day and were thankful they had a relationship
where they could discuss things openly with each other. But they still didn’t know what
they were going to do about that vacation . . . or that motor scooter.
Characteristics of a Negotiation Situation
The Joe and Sue Carter story highlights the variety of situations that can be handled by
negotiation. Any of us might encounter one or more of these situations over the course of
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Characteristics of a Negotiation Situation
7
a few days or weeks. As we defined earlier, negotiation is a process by which two or more
parties attempt to resolve their opposing interests. Thus, as we will point out later on this
chapter, negotiation is one of several mechanisms by which people can resolve conflicts.
Negotiation situations have fundamentally the same characteristics, whether they are peace
negotiations between countries at war, business negotiations between buyer and seller or
labor and management, or an angry guest trying to figure out how to get a hot shower before a critical interview. Those who have written extensively about negotiation argue that
there are several characteristics common to all negotiation situations (see Lewicki, 1992;
Rubin and Brown, 1975):
1.
2.
3.
4.
There are two or more parties—that is, two or more individuals, groups, or organizations. Although people can “negotiate” with themselves—as when someone debates
in their head whether to spend a Saturday afternoon studying, playing tennis, or going
to the football game—we consider negotiation as a process between individuals, within
groups, and between groups.2 In the Carter story, Joe negotiates with his wife, the
purchasing manager, and the auto salesman, and Sue negotiates with her husband, the
senior management at the bank, and the Conservation Commission, among others.
Both still face an upcoming negotiation with the children about the vacation . . . and
that motor scooter.
There is a conflict of needs and desires between two or more parties—that is,
what one wants is not necessarily what the other one wants—and the parties must
search for a way to resolve the conflict. Joe and Sue face negotiations over vacations,
management of their children, budgets, automobiles, company procedures, and
community practices for issuing building permits and preserving natural resources,
among others.
The parties negotiate by choice! That is, they negotiate because they think they can
get a better deal by negotiating than by simply accepting what the other side will
voluntarily give them or let them have. Negotiation is largely a voluntary process.
We negotiate because we think we can improve our outcome or result, compared
with not negotiating or simply accepting what the other side offers. It is a strategy
pursued by choice; seldom are we required to negotiate. There are times to negotiate
and times not to negotiate (see Box 1.1 for examples of when we should not negotiate).
Our experience is that most individuals in Western culture do not negotiate
enough—that is, we assume a price or situation is nonnegotiable and don’t even
bother to ask or to make a counteroffer!
When we negotiate, we expect a “give-and-take” process that is fundamental to our
understanding of the word “negotiation.” We expect that both sides will modify or
move away from their opening statements, requests, or demands. Although both parties
may at first argue strenuously for what they want—each pushing the other side to
move first—ultimately both sides will modify their opening position in order to
reach an agreement. This movement may be toward the “middle” of their positions,
called a compromise. However, truly creative negotiations may not require compromise;
instead the parties may invent a solution that meets the objectives of all parties.
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BOX
1.1
When You Shouldn’t Negotiate
There are times when you should avoid negotiating. In these situations, stand your ground and
you’ll come out ahead.
When you’d lose the farm:
If you’re in a situation where you could lose
everything, choose other options rather
than negotiate.
When you’re sold out:
When you’re running at capacity, don’t deal.
Raise your prices instead.
When the demands are unethical:
Don’t negotiate if your counterpart asks
for something you cannot support because it’s illegal, unethical, or morally
inappropriate—for example, either paying
or accepting a bribe. When your character
or your reputation is compromised, you
lose in the long run.
When you don’t care:
If you have no stake in the outcome, don’t
negotiate. You have everything to lose
and nothing to gain.
When you don’t have time:
When you’re pressed for time, you may choose
not to negotiate. If the time pressure
works against you, you’ll make mistakes,
you give in too quickly, and you may fail
to consider the implications of your concessions. When under the gun, you’ll settle for less than you could otherwise get.
5.
When they act in bad faith:
Stop the negotiation when your counterpart
shows signs of acting in bad faith. If
you can’t trust their negotiating, you
can’t trust their agreement. In this case,
negotiation is of little or no value. Stick
to your guns and cover your position, or
discredit them.
When waiting would improve your
position:
Perhaps you’ll have a new technology
available soon. Maybe your financial
situation will improve. Another opportunity may present itself. If the odds are
good that you’ll gain ground with a
delay, wait.
When you’re not prepared:
If you don’t prepare, you’ll think of all your
best questions, responses, and concessions on the way home. Gathering your
reconnaissance and rehearsing the negotiation will pay off handsomely. If
you’re not ready, just say “no.”
Source: Conrad Levinson, Mark S. A. Smith, Orvel Ray
Wilson, Guerrilla Negotiating: Unconventional Weapons and
Tactics to Get What You Want (New York: John Wiley & Sons,
Inc., 1999), pp. 22–23.
Of course, if the parties do NOT consider it a negotiation, then they don’t necessarily
expect to modify their position and engage in this give-and-take (see Box 1.2).
The parties prefer to negotiate and search for agreement rather than to fight openly,
have one side dominate and the other capitulate, permanently break off contact, or
take their dispute to a higher authority to resolve it. Negotiation occurs when the
parties prefer to invent their own solution for resolving the conflict, when there is
no fixed or established set of rules or procedures for how to resolve the conflict, or
when they choose to bypass those rules. Organizations and systems invent policies
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Sign in a New York Deli
BOX
1.2
“For those of you who need to haggle over the
price of your sandwich, we will gladly raise the
price so we can give you a discount!”
and procedures for addressing and managing those procedures. Equipment rental services have a policy for what they should charge if a rental is kept too long. Normally,
people just pay the fine. They might be able to negotiate a fee reduction, however, if
they have a good excuse for why the video is being returned late. Similarly, attorneys
negotiate or plea-bargain for their clients who would rather be assured of a negotiated
settlement than take their chances with a judge and jury in the courtroom. Similarly,
the courts may prefer to negotiate as well to clear the case off the docket, save
money and assure some payment of a fine rather than risk having the defendant set
free on some legal technicality. In the Carter story, Joe pursues negotiation, rather
than letting his wife decide where to spend the vacation; pressures the salesman to
reduce the price of the car, rather than paying the quoted price; and argues with the
finance group about the impact of the budget cuts, rather than simply accepting them
without question. Sue uses negotiation to try to change the bank’s loan review procedures, rather than accepting the status quo, and she works to change the shopping
mall site plan to make both conservationists and businesses happy, rather than letting
others decide it or watch it go to court. But what about that motor scooter . . . ?
6. Successful negotiation involves the management of tangibles (e.g., the price or the
terms of agreement) and also the resolution of intangibles. Intangible factors are the
underlying psychological motivations that may directly or indirectly influence the
parties during a negotiation. Some examples of intangibles are (a) the need to “win,”
beat the other party, or avoid losing to the other party; (b) the need to look “good,”
“competent,” or “tough” to the people you represent; (c) the need to defend an
important principle or precedent in a negotiation; and (d) the need to appear “fair,”
or “honorable” or to protect one’s reputation; or (e) the need to maintain a good
relationship with the other party after the negotiation is over, primarily by maintaining trust and reducing uncertainty (Saorin-Iborra, 2006). Intangibles are often rooted
in personal values and emotions. Intangible factors can have an enormous influence
on negotiation processes and outcomes; it is almost impossible to ignore intangibles
because they affect our judgment about what is fair, or right, or appropriate in the
resolution of the tangibles. For example, Joe may not want to make Ed Laine angry
about the purchasing problem because he needs Ed’s support in the upcoming budget
negotiations, but Joe also doesn’t want to look weak to his department’s engineers,
who expect him to support them. Thus, for Joe, the important intangibles are preserving his relationship with Ed Laine and looking strong and “tough” to his engineers.
Intangibles become a major problem in negotiation when negotiators fail to understand how they are affecting decision making or when they dominate negotiations on the
tangibles. For example, see Box 1.3 about the problems that the urge to win can create for
negotiators.
9
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BOX
1.3
When the Urge to Win Overwhelms
Rational Decision Making
There are times when the urge to win overwhelms
logic. Authors Malhotra, Ku, and Murnighan
offer the example of a takeover battle between
Johnson & Johnson (J&J) and Boston Scientific
to buy Guidant, a medical device maker. Even
though Guidant was in the middle of recalling
23,000 pacemakers and telling another 27,000 patients who had pacemakers already implanted to
“consult their doctors,” the bidding war between
the two buyers lead to a final price of $27.2 billion,
$1.8 billion more than J&J’s initial bid. After the
recall, Guidant shares went from $23 to $17 a
share. Fortune magazine later called the acquisition
“arguably the second worst ever,” only surpassed
by AOL’s infamous purchase of Time Warner.
What fuels these competitive dynamics that
lead to bad decisions? The authors identify several key factors:
•
•
Rivalry. When parties are intensely competitive with one another, they are willing to suspend rational decision making.
Time pressure. An artificial deadline, or time
pressures such as those in an auction, can
•
•
push people into quick (and often erroneous)
decision making.
The spotlight. If audiences are watching and
evaluating the actor, he is more likely to stick
to his guns and escalate his investment just
to look strong and tough to the audience (see
Chapter 11).
The presence of attorneys. The authors indicate
that attorneys, who are more oriented toward
“winning” and “losing” in legal battles, may
pressure their clients toward winning when
options for settlement may clearly be present.
This perspective may be complicated by the
way the attorneys are paid for their services.
The authors offer several important suggestions to reduce or eliminate the negative impact
of these competitive pressures, in order to make
more sound and reasoned decisions.
Source: Deepak K. Malhotra, Gillian Ku, and J. Keith Murnighan,
“When Winning is Everything,” Harvard Business Review,
May 2008, pp. 78–86.
Interdependence
One of the key characteristics of a negotiation situation is that the parties need each other
in order to achieve their preferred objectives or outcomes. That is, either they must coordinate with each other to achieve their own objectives, or they choose to work together
because the possible outcome is better than they can achieve by working on their own.
When the parties depend on each other to achieve their own preferred outcome, they are
interdependent.
Most relationships between parties may be characterized in one of three ways: independent, dependent, or interdependent. Independent parties are able to meet their own
needs without the help and assistance of others; they can be relatively detached, indifferent, and uninvolved with others. Dependent parties must rely on others for what they need;
because they need the help, benevolence, or cooperation of the other, the dependent party
must accept and accommodate to that provider’s whims and idiosyncrasies. For example,
if an employee is totally dependent on an employer for a job and salary, the employee will
have to either do the job as instructed and accept the pay offered, or go without that job.
Interdependent parties, however, are characterized by interlocking goals—the parties need
each other in order to accomplish their objectives, and hence have the potential to influence
10
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Interdependence
11
each other. For instance, in a project management team, no single person could complete a
complex project alone; the time limit is usually too short, and no individual has all the skills
or knowledge to complete it. For the group to accomplish its goals, each person needs to
rely on the other project team members to contribute their time, knowledge, and resources
and to synchronize their efforts. Note that having interdependent goals does not mean that
everyone wants or needs exactly the same thing. Different project team members may need
different things, but they must work together for each to accomplish their goals. This mix
of convergent and conflicting goals characterizes many interdependent relationships. (See
Box 1.4 for a perspective on interdependence and the importance of intangibles from a
famous agent who represents professional athletes in their negotiated contracts.)
Types of Interdependence Affect Outcomes
The interdependence of people’s goals, and the structure of the situation in which they are
going to negotiate, strongly shapes negotiation processes and outcomes. When the goals
of two or more people are interconnected so that only one can achieve the goal—such as
running a race in which there will be only one winner—this is a competitive situation, also
known as a zero-sum or distributive situation, in which “individuals are so linked together
that there is a negative correlation between their goal attainments” (Deutsch, 1962, p. 276).
Zero-sum or distributive situations are also present when parties are attempting to divide a
limited or scarce resource, such as a pot of money, a fixed block of time, and the like. To the
degree that one person achieves his or her goal, the other’s goal attainment is blocked. In
contrast, when parties’ goals are linked so that one person’s goal achievement helps others
to achieve their goals, it is a mutual-gains situation, also known as a non-zero-sum or integrative situation, where there is a positive correlation between the goal attainments of both
parties. If one person is a great music composer and the other is a great writer of lyrics, they
can create a wonderful Broadway musical hit together. The music and words may be good
separately, but fantastic together. To the degree that one person achieves his or her goal,
the other’s goals are not necessarily blocked, and may in fact be significantly enhanced.
The strategy and tactics that accompany each type of situation are discussed further in the
upcoming section, Value Claiming and Value Creation, and in Chapters 2 and 3.
Alternatives Shape Interdependence
We noted at the beginning of this section that parties choose to work together because the
possible outcome is better than what may occur if they do not work together. Evaluating
interdependence therefore also depends heavily on the desirability of alternatives to working together. Roger Fisher, William Ury, and Bruce Patton (1991), in their popular book
Getting to Yes: Negotiating Agreement without Giving In, stress that “whether you should
or should not agree on something in a negotiation depends entirely upon the attractiveness
to you of the best available alternative” (p. 105). They call this alternative a BATNA (an
acronym for best alternative to a negotiated agreement) and suggest that negotiators need
to understand their own BATNA and the other party’s BATNA. The value of a person’s
BATNA is always relative to the possible settlements available in the current negotiation.
A BATNA may offer independence, dependence, or interdependence with someone else.
A student who is a month away from college graduation and has only one job offer at a
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BOX
1.4
Perspective
“I have been representing athletes for almost a
quarter century, longer than some of them have
been alive. During the course of that time, I have
developed deep relationships—friendships and
partnerships—with many of the executives with
whom I do business. We have done dozens of deals
with one another over the years. There has been
contention and struggle. There have been misunderstandings at times. But in the end, not unlike
a marriage, we have stayed together, moved forward, and grown. That kind of shared relationship
over time results in a foundation of trust and respect that is immeasurably valuable.
But that kind of trust must be earned. I
understood this when I did my first deal 23
years ago. A basic premise of my entire career
has been the knowledge that I will be working with the same people again and again. That
means that I am always thinking about the deal
I am making right now but also about a given
player’s future deals. It means I see the other
party as a potential partner, not as a foe to be
vanquished.
If it were not for the team owners, I would
not have a profession. If they did not feel that
they could operate at a profit, we would not have
an industry. I may believe that a player deserves
every penny he is paid, but that is only half the
equation. The other half depends upon whether
the owner believes he can profit by making that
payment.
These are not showdowns. In the end they
are collaborations. We each have an interest in
the success and health of the other. I need and
want professional sports to survive and thrive.
The various leagues need a steady supply of
quality players who are quality people. Each side
has something to offer the other. Each side depends on the other.
In any industry in which repeat business is
done with the same parties, there is always a balance between pushing the limit on any particular
negotiation and making sure the other party—
and your relationship with him—survives intact.
This is not to suggest that you subordinate your
interests to his. But sometimes it is in your best
long-term interest to leave something on the
table, especially if the other party has made an
error that works to your advantage.
No one likes being taken advantage of. We
are all human beings. We all have the potential to
make a mistake. No matter how much each side
stresses preparation, there is no way to consider
every factor in a negotiation. There may be times
during the process where one party realizes he
has made an error in calculation or in interpretation and may ask that that point be revised. There
may be times where terms have been agreed to
but the other party then sees a mistake and asks
you to let him off the hook. You don’t have to
do it. You could stick him on that point. But you
need to ask yourself, Is it worth it? Is what I have
to gain here worth what I will lose in terms of
this person’s willingness to work with me in the
future? In most cases, the long-term relationship
is much more valuable than the short-term gain.
Sometimes the other party may make a mistake
and not know it. There are times when the GM
or owner I am dealing with makes a major error
in his calculations or commits a major oversight,
and I can easily take advantage of that and just
nail him.
But I don’t. He shows me his jugular, and
instead of slashing it, I pull back. I might even
point out his error. Because if I do crush him, he
will eventually realize it. And although I might
make a killing on that particular deal, I will also
have killed our relationship and, very likely, any
possibility of future agreements. Or it might be
that the person’s mistake costs him his job, in
which case someone else might take his place—
who is much rougher to deal with and is intent
on paying me back for taking his predecessor to
the cleaners.”
Source: Leigh Steinberg, Winning with Integrity (New York:
Random House, 1998), pp. 217–18.
12
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Mutual Adjustment
13
salary far lower than he hoped has the choice of accepting that job offer or unemployment;
there is little chance that he is going to influence the company to pay him much more than
their starting offer.3 A student who has two offers has a choice between two future interdependent relationships; not only does she have a choice, but she can probably use each job
offer to attempt to improve the agreement by playing the employers off against each other
(asking employer A to improve its offer over B, etc.). Remember that every possible interdependency has an alternative; negotiators can always say “no” and walk away, although
the alternative might not be a very good one. We will further discuss the role and use of
BATNAs in Chapters 2, 3, 4, and 7.
Mutual Adjustment
When parties are interdependent, they have to find a way to resolve their differences. Both
parties can influence the other’s outcomes and decisions, and their own outcomes and
decisions can be influenced by the other.4 This mutual adjustment continues throughout
the negotiation as both parties act to influence the other.5 It is important to recognize that
negotiation is a process that transforms over time, and mutual adjustment is one of the key
causes of the changes that occur during a negotiation.6
Let us return to Sue Carter’s job in the small community bank. Rather than continuing
to have her loans be approved late, which means she loses the loan and doesn’t qualify for
bonus pay, Sue is thinking about leaving the small bank and taking a job with Intergalactic
Bank in the next city. Her prospective manager, Max, thinks Sue is a desirable candidate for
the position and is ready to offer her the job. Max and Sue are now attempting to establish
Sue’s salary. The job advertisement announced the salary as “competitive.” After talking
with her husband Joe and looking at statistics on bank loan officers’ pay in the state, and
considering her past experience as a loan officer, Sue identified a salary below which she will
not work ($70,000) and hopes she might get considerably more. But because Intergalactic
Bank has lots of job applicants and is a very desirable employer in the area, Sue has decided
not to state her minimally acceptable salary; she suspects that the bank will pay no more
than necessary and that her minimum would be accepted quickly. Moreover, she knows that
it would be difficult to raise the level if it should turn out that $70,000 was considerably
below what Max would pay. Sue has thought of stating her ideal salary ($80,000), but she
suspects that Max will view her as either too aggressive or rude for requesting that much.
Max might refuse to hire her, or even if they agreed on salary, Max would have formed an
impression of Sue as a person with an inflated sense of her own worth and capabilities.
Let’s take a closer look at what is happening here. Sue is making her decision about an
opening salary request based in part on what bank loan officers are paid in the area, but also
very much on how she anticipates Max will react to her negotiating tactics. Sue recognizes
that her actions will affect Max. Sue also recognizes that the way Max acts toward her in
the future will be influenced by the way her actions affect him now. As a result, Sue is assessing the indirect impact of her behavior on herself. Further, she also knows that Max is
probably alert to this and will look upon any statement by Sue as reflecting a preliminary
position on salary rather than a final one. To counter this expected view, Sue will try to find
some way to state a proposed salary that is higher than her minimum, but lower than her
“dream” salary offer. Sue is choosing among opening requests with a thought not only to
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14
Chapter 1 The Nature of Negotiation
how they will affect Max but also to how they will lead Max to act toward Sue. Further, if
she really thought about it, Sue might imagine that Max believes she will act in this way
and makes her decision on the basis of this belief.
The reader may wonder if people really pay attention to all these layers of nuance
and complexity or plot in such detail about their negotiation with others. The answer is
“NO”! First, because they don’t think beyond step 1—deciding what they really want—and
second, if they did, they would likely be frozen into inactivity while they tried to puzzle
through all the possibilities. However, engaging in this level of thinking can help anticipate
the possible ways negotiations might move as the parties move, in some form of mutual
adjustment, toward agreement. The effective negotiator needs to understand how people
will adjust and readjust, and how the negotiations might twist and turn, based on one’s own
moves, the others’ responses, my own countermoves, etc.
It might seem that the best strategy for successful mutual adjustment to the other is
grounded in the assumption that the more information one has about the other person, the
better. There is the possibility, however, that too much knowledge only confuses (Beisecker,
Walker, and Bart, 1989; Raven and Rubin, 1976). For example, suppose Sue knows the
average salary ranges for clerical, supervisory, and managerial positions for banks in her
state and region. Does all this information help Sue determine her actions, or does it only
confuse things? In fact, even with all of this additional information, Sue may still not have
reached a decision about what salary she should be paid, other than a minimum figure below which she will not go. This state of affairs is typical to many negotiations. Both parties
have defined their outer limits for an acceptable settlement (how high or low they are willing to go), but within that range, neither has determined what the preferred number should
be. Or they have thought only about a desired salary, but not a minimally acceptable one.
The parties need to exchange information, attempt to influence each other, and problem
solve. They must work toward a solution that takes into account each person’s requirements
and, hopefully, optimize the outcomes for both.7
Mutual Adjustment and Concession Making
Negotiations often begin with statements of opening positions. Each party states its most
preferred settlement proposal, hoping that the other side will simply accept it, but not really believing that a simple “yes” will be forthcoming from the other side (remember our
key definitional element of negotiation as the expectation of give-and-take). If the proposal
isn’t readily accepted by the other, negotiators begin to defend their own initial proposals
and critique the others’ proposals. Each party’s rejoinder usually suggests alterations to
the other party’s proposal and perhaps also contains changes to his or her own position.
When one party agrees to make a change in his or her position, a concession has been
made (Pruitt, 1981). Concessions restrict the range of options within which a solution or
agreement will be reached; when a party makes a concession, the bargaining range (the
range of possible agreements between the two party’s minimally acceptable settlements) is
further constrained. For instance, Sue would like to get a starting salary of $80,000, but she
scales her request down to $75,000, thereby eliminating all possible salary options above
$75,000. Before making any concessions to a salary below $75,000, Sue probably will
want to see some willingness on the part of the bank to improve its salary offer.
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Mutual Adjustment
15
Two Dilemmas in Mutual Adjustment
Deciding how to use concessions as signals to the other side and attempting to read the
signals in the other’s concessions are not easy tasks, especially when there is little trust
between negotiators. Two of the dilemmas that all negotiators face, identified by Harold
Kelley (1966), help explain why this is the case. The first dilemma, the dilemma of honesty,
concerns how much of the truth to tell the other party. (The ethical considerations of these
dilemmas are discussed in Chapter 5.) On the one hand, telling the other party everything
about your situation may give that person the opportunity to take advantage of you. On the
other hand, not telling the other person anything about your needs and desires may lead to
a stalemate. Just how much of the truth should you tell the other party? If Sue told Max that
she would work for as little as $70,000 but would like to start at $80,000, it is quite possible
that Max would hire her for $70,000 and allocate the extra money that he might have paid
her elsewhere in the budget.8 If, however, Sue did not tell Max any information about her
salary aspirations, then Max would have a difficult time knowing Sue’s aspirations and
what she would consider an attractive offer. He might make an offer based on the salary of
the last person he hired, or claim “bank policy” for hiring at her experience level, and wait
for her reaction to determine what to say next.
Kelley’s second dilemma is the dilemma of trust: How much should negotiators believe what the other party tells them? If you believe everything the other party says, then
he or she could take advantage of you. If you believe nothing that the other party says, then
you will have a great deal of difficulty in reaching an agreement. How much you should
trust the other party depends on many factors, including the reputation of the other party,
how he or she treated you in the past, and a clear understanding of the pressures on the
other in the present circumstances. If Max told Sue that $65,000 was the maximum he was
allowed to pay her for the job without seeking approval “from the Intergalactic corporate
office,” should Sue believe him or not? As you can see, sharing and clarifying information
is not as easy as it first appears.
The search for an optimal solution through the processes of giving information and
making concessions is greatly aided by trust and a belief that you’re being treated honestly
and fairly. Two efforts in negotiation help to create such trust and beliefs—one is based on
perceptions of outcomes and the other on perceptions of the process. Outcome perceptions
can be shaped by managing how the receiver views the proposed result. If Max convinces
Sue that a lower salary for the job is relatively unimportant given the high potential for promotion associated with the position and the very generous bonus policy, then Sue may feel
more comfortable accepting a lower salary. Perceptions of the trustworthiness and credibility of the process can be enhanced by conveying images that signal fairness and reciprocity
in proposals and concessions (see Box 1.5). When one party makes several proposals that
are rejected by the other party and the other party offers no proposal, the first party may
feel improperly treated and may break off negotiations. When people make a concession,
they trust the other party and the process far more if a concession is returned. In fact,
the belief that concessions will occur during negotiations appears to be almost universal.
During training seminars, we have asked negotiators from more than 50 countries if they
expect give-and-take to occur during negotiations in their culture; all have said they do.
This pattern of give-and-take is not just a characteristic of negotiation; it is also essential to
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BOX
1.5
The Importance of Aligning Perceptions
Having information about your negotiation partner’s perceptions is an important element of negotiation success. When your expectations of a
negotiated outcome are based on faulty information, it is likely that the other party will not take
you seriously. Take, for example, the following
story told to one of the authors:
At the end of a job interview, the recruiter asked
the enthusiastic MBA student, “And what starting
salary were you looking for?”
The MBA candidate replied, “I would like
to start in the neighborhood of $150,000 per year,
depending on your benefits package.”
The recruiter said, “Well, what would you
say to a package of five weeks’ vacation, 14 paid
holidays, full medical and dental coverage, company matching retirement fund up to 50 percent
of your salary, and a new company car leased for
your use every two years . . . say, a red Porsche?”
The MBA sat up straight and said, “Wow!
Are you kidding?”
“Of course,” said the recruiter. “But you
started it.”
joint problem solving in most interdependent relationships.9 Satisfaction with a negotiation is
as much determined by the process through which an agreement is reached as with the actual
outcome obtained. To eliminate or even deliberately attempt to reduce this give-and-take—as
some legal and labor–management negotiating strategies have attempted10—is to shortcircuit the process, and it may destroy both the basis for trust and any possibility of achieving a mutually satisfactory result.
Value Claiming and Value Creation
Earlier, we identified two types of interdependent situations—zero-sum and non-zero-sum.
Zero-sum or distributive situations are ones in which there can be only one winner or
where the parties are attempting to get the larger share or piece of a fixed resource, such as
an amount of raw material, money, time, and the like. In contrast, non-zero-sum or integrative or mutual gains situations are ones in which many people can achieve their goals and
objectives.
The structure of the interdependence shapes the strategies and tactics that negotiators
employ. In distributive situations, negotiators are motivated to win the competition and beat
the other party or to gain the largest piece of the fixed resource that they can. To achieve
these objectives, negotiators usually employ win–lose strategies and tactics. This approach
to negotiation—called distributive bargaining—accepts the fact that there can only be one
winner given the situation and pursues a course of action to be that winner. The purpose of
the negotiation is to claim value—that is, to do whatever is necessary to claim the reward,
gain the lion’s share of the prize, or gain the largest piece possible (Lax and Sebenius,
1986). An example of this type of negotiation is purchasing a used car or buying a used
refrigerator at a yard sale. We fully explore the strategy and tactics of distributive bargaining, or processes of claiming value, in Chapter 2 and some of the less ethical tactics that
can accompany this process in Chapter 5.
16
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Value Claiming and Value Creation
17
In contrast, in integrative situations the negotiators should employ win–win strategies
and tactics. This approach to negotiation—called integrative negotiation—attempts to find
solutions so both parties can do well and achieve their goals. The purpose of the negotiation is to create value—that is, to find a way for all parties to meet their objectives, either
by identifying more resources or finding unique ways to share and coordinate the use of
existing resources. An example of this type of negotiation might be planning a wedding
so that the bride, groom, and both families are happy and satisfied, and the guests have
a wonderful time. We fully explore the strategy and tactics of integrative, value-creating
negotiations in Chapter 3.
It would be simple and elegant if we could classify all negotiation problems into one
of these two types and indicate which strategy and tactics are appropriate for each problem.
Unfortunately, most actual negotiations are a combination of claiming and creating value
processes. The implications for this are significant:
1.
2.
3.
Negotiators must be able to recognize situations that require more of one approach
than the other: those that require predominantly distributive strategy and tactics,
and those that require integrative strategy and tactics. Generally, distributive bargaining is most appropriate when time and resources are limited, when the other is
likely to be competitive, and when there is no likelihood of future interaction with
the other party. Most other situations should be approached with an integrative
strategy.
Negotiators must be versatile in their comfort and use of both major strategic approaches. Not only must negotiators be able to recognize which strategy is most
appropriate, but they must be able to employ both approaches with equal versatility.
There is no single “best,” “preferred,” or “right” way to negotiate; the choice of negotiation strategy requires adaptation to the situation, as we will explain more fully
in the next section on conflict. Moreover, if most negotiation issues or problems have
components of both claiming and creating values, then negotiators must be able to
use both approaches in the same deliberation.
Negotiator perceptions of situations tend to be biased toward seeing problems as
more distributive/competitive than they really are. Accurately perceiving the nature
of the interdependence between the parties is critical for successful negotiation.
Unfortunately, most negotiators do not accurately perceive these situations. People
bring baggage with them to a negotiation: past experience, personality, moods, assumptions about the other party, and beliefs about how to negotiate. These elements
dramatically shape how people perceive an interdependent situation, and these perceptions have a strong effect on the subsequent negotiation. Moreover, research has
shown that people are prone to several systematic biases in the way they perceive
and judge interdependent situations.11 While we discuss these biases extensively in
Chapter 6, the important point here is that the predominant bias is to see interdependent situations as more distributive or competitive than they really are. As a result,
there is a tendency to assume a negotiation problem is more zero-sum than it may
be and to overuse distributive strategies for solving the problem. As a consequence,
negotiators often leave unclaimed value at the end of their negotiations because they
failed to recognize opportunities for creating value.
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Chapter 1 The Nature of Negotiation
The tendency for negotiators to see the world as more competitive and distributive than it is,
and to underuse integrative, creating-value processes, suggests that many negotiations yield
suboptimal outcomes. This does not need to be the case. At the most fundamental level,
successful coordination of interdependence has the potential to lead to synergy, which is
the notion that “the whole is greater than the sum of its parts.” There are numerous examples of synergy. In the business world, many research and development joint ventures
are designed to bring together experts from different industries, disciplines, or problem
orientations to maximize their innovative potential beyond what each company can do
individually. Examples abound of new technologies in the areas of medicine, communication, computing, and the like. The fiber-optic cable industry was pioneered by research
specialists from the glass industry and specialists in the manufacturing of electrical wire
and cable—industry groups that had little previous conversation or contact. A vast amount
of new medical instrumentation and technology has been pioneered in partnerships between biologists and engineers. In these situations, interdependence was created between
two or more of the parties, and the creators of these enterprises, who successfully applied
the negotiation skills discussed throughout this book, enhanced the potential for successful
value creation.
Value may be created in numerous ways, and the heart of the process lies in exploiting
the differences that exist between the negotiators (Lax and Sebenius, 1986). The key differences among negotiators include these:
1.
2.
3.
4.
lew29449_ch01_001-033.indd 18
Differences in interests. Negotiators seldom value all items in a negotiation equally.
For instance, in discussing a compensation package, a company may be more willing
to concede on the amount of a signing bonus than on salary because the bonus occurs
only in the first year, while salary is a permanent expense. An advertising company
may be quite willing to bend on creative control of a project, but very protective of
control over advertising placement. Finding compatibility in different interests is often the key to unlocking the puzzle of value creation.
Differences in judgments about the future. People differ in their evaluation of what
something is worth or the future value of an item. For instance, is that piece of
swamp land a valuable wetland to preserve, or a bug-infested flood control problem
near a housing development, or a swamp that needs to be drained to build a shopping
center? How parties see the present and what is possible that needs to be created—or
avoided—can create opportunities for the parties to get together.
Differences in risk tolerance. People differ in the amount of risk they are comfortable assuming. A young, single-income family with three children can probably
sustain less risk than a mature, dual-income couple near retirement. A company with
a cash flow problem can assume less risk of expanding its operations than one that is
cash-rich.
Differences in time preference. Negotiators frequently differ in how time affects
them. One negotiator may want to realize gains now while the other may be happy
to defer gains into the future; one needs a quick settlement while the other has no
need for any change in the status quo. Differences in time preferences have the
potential to create value in a negotiation. For instance, a car salesman may want to
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Conflict
19
close a deal by the end of the month in order to be eligible for a special company
bonus, while the potential buyer intends to trade his car “sometime in the next six
months.”
In summary, while value is often created by exploiting common interests, differences can
also serve as the basis for creating value. The heart of negotiation is exploring both common and different interests to create this value and employing such interests as the foundation for a strong and lasting agreement. Differences can be seen as insurmountable,
however, and in that case serve as barriers to reaching agreement. As a result, negotiators
must also learn to manage conflict effectively in order to manage their differences while
searching for ways to maximize their joint value. Managing conflict is the focus of the next
section.
Conflict
As we have been discussing, a potential consequence of interdependent relationships is
conflict. Conflict can result from the strongly divergent needs of the two parties or from
misperceptions and misunderstandings. Conflict can occur when the two parties are working toward the same goal and generally want the same outcome or when both parties want
very different outcomes. Regardless of the cause of the conflict, negotiation can play an
important role in resolving it effectively. In this section, we will define conflict, discuss the
different levels of conflict that can occur, review the functions and dysfunctions of conflict,
and discuss strategies for managing conflict effectively.
Definitions
Conflict may be defined as a “sharp disagreement or opposition, as of interests, ideas,
etc.” and includes “the perceived divergence of interest, or a belief that the parties’ current
aspirations cannot be achieved simultaneously” (both from Pruitt and Rubin, 1986, p. 4).
Conflict results from “the interaction of interdependent people who perceived incompatible goals and interference from each other in achieving those goals” (Hocker and Wilmot,
1985, p. 12).
Levels of Conflict
One way to understand conflict is to distinguish it by level. Four levels of conflict are commonly identified:
1.
Intrapersonal or intrapsychic conflict. These conflicts occur within an individual.
Sources of conflict can include ideas, thoughts, emotions, values, predispositions,
or drives that are in conflict with each other. We want an ice cream cone badly, but
we know that ice cream is very fattening. We are angry at our boss, but we’re afraid
to express that anger because the boss might fire us for being insubordinate. The
dynamics of intrapsychic conflict are traditionally studied by various subfields of
psychology: cognitive psychologists, personality theorists, clinical psychologists,
and psychiatrists (c.f. Bazerman, Tenbrunsel, and Wade-Benzoni, 1998). Although
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Chapter 1 The Nature of Negotiation
2.
3.
4.
we will occasionally delve into the internal psychological dynamics of negotiators (e.g., in Chapters 6 and 15), this book generally doesn’t address intrapersonal
conflict.
Interpersonal conflict. A second major level of conflict is between individuals.
Interpersonal conflict occurs between co-workers, spouses, siblings, roommates,
or neighbors. Most of the negotiation theory in this book is drawn from studies of
interpersonal negotiation and directly addresses the management and resolution
of interpersonal conflict.
Intragroup conflict. A third major level of conflict is within a group—among team
and work group members and within families, classes, living units, and tribes. At the
intragroup level, we analyze conflict as it affects the ability of the group to make decisions, work productively, resolve its differences, and continue to achieve its goals
effectively. Within-group negotiations, in various forms, are discussed in Chapters
11, 12, and 13.
Intergroup conflict. The final level of conflict is intergroup—between
organizations, ethnic groups, warring nations, or feuding families or within splintered, fragmented communities. At this level, conflict is quite intricate because of
the large number of people involved and the multitudinous ways they can interact
with each other. Negotiations at this level are also the most complex. We will discuss the nature of intergroup negotiations throughout the book, particularly
in Chapters 11 and 13.
Functions and Dysfunctions of Conflict
Most people initially believe that conflict is bad or dysfunctional. This belief has two aspects:
first, that conflict is an indication that something is wrong, broken or dysfunctional, and,
second, that conflict creates largely destructive consequences. Deutsch (1973) and others12
have elaborated on many of the elements that contribute to conflict’s destructive image:
1.
2.
3.
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Competitive, win–lose goals. Parties compete against each other because they believe
that their interdependence is such that goals are in opposition and both cannot simultaneously achieve their objectives.13 Competitive goals lead to competitive processes
to obtain those goals.
Misperception and bias. As conflict intensifies, perceptions become distorted.
People come to view things consistently with their own perspective of the conflict.
Hence, they tend to interpret people and events as being either with them or against
them. In addition, thinking tends to become stereotypical and biased—parties
endorse people and events that support their position and reject outright those who
oppose them.
Emotionality. Conflicts tend to become emotionally charged as the parties become
anxious, irritated, annoyed, angry, or frustrated. Emotions overwhelm clear thinking,
and the parties may become increasingly irrational as the conflict escalates.
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Conflict
4.
5.
6.
7.
8.
21
Decreased communication. Productive communication declines with conflict.
Parties communicate less with those who disagree with them and more with
those who agree. The communication that does occur is often an attempt to
defeat, demean, or debunk the other’s view or to strengthen one’s own prior
arguments.
Blurred issues. The central issues in the dispute become blurred and
less well defined. Generalizations abound. The conflict becomes a vortex that
sucks in unrelated issues and innocent bystanders. The parties become less clear
about how the dispute started, what it is “really about,” or what it will take to
solve it.
Rigid commitments. The parties become locked into positions. As the other side
challenges them, parties become more committed to their points of view and less
willing to back down from them for fear of losing face and looking foolish. Thinking
processes become rigid, and the parties tend to see issues as simple and “either/or”
rather than as complex and multidimensional (refer back to our earlier example of
the deadlocked government negotiation).
Magnified differences, minimized similarities. As parties lock into commitments and
issues become blurred, they tend to see each other—and each other’s positions—as
polar opposites. Factors that distinguish and separate them from each other become
highlighted and emphasized, while similarities that they share become oversimplified
and minimized. This distortion leads the parties to believe they are further apart from
each other than they really may be, and hence they may work less hard to find
common ground.
Escalation of the conflict. As the conflict progresses, each side becomes more entrenched in its own view, less tolerant and accepting of the other, more defensive and
less communicative, and more emotional. The net result is that both parties attempt
to win by increasing their commitment to their position, increasing the resources
they are willing to spend to win, and increasing their tenacity in holding their ground
under pressure. Both sides believe that by adding more pressure (resources, commitment, enthusiasm, energy, etc.), they can force the other to capitulate and admit
defeat. As most destructive conflicts reveal, however, nothing could be further from
the truth! Escalation of the conflict level and commitment to winning can increase so
high that the parties will destroy their ability to resolve the conflict or ever be able to
deal with each other again.
These are the processes that are commonly associated with escalating, polarized, “intractable” conflict (see also Chapter 17). However, conflict also has many productive aspects
(Coser, 1956; Deutsch, 1973). Figure 1.1 outlines some of these productive aspects. From
this perspective, conflict is not simply destructive or productive; it is both. The objective is
not to eliminate conflict but to learn how to manage it to control the destructive elements
while enjoying the productive aspects. Negotiation is a strategy for productively managing
conflict.
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Chapter 1 The Nature of Negotiation
FIGURE 1.1 | Functions and Benefits of Conflict
•
•
•
•
•
•
•
Discussing conflict makes organizational members more aware and able to cope with
problems. Knowing that others are frustrated and want change creates incentives to try to
solve the underlying problem.
Conflict promises organizational change and adaptation. Procedures, assignments, budget
allocations, and other organizational practices are challenged. Conflict draws attention to
those issues that may interfere with and frustrate employees.
Conflict strengthens relationships and heightens morale. Employees realize that their relationships are strong enough to withstand the test of conflict; they need not avoid frustrations
and problems. They can release their tensions through discussion and problem solving.
Conflict promotes awareness of self and others. Through conflict, people learn what
makes them angry, frustrated, and frightened and also what is important to them. Knowing
what we are willing to fight for tells us a lot about ourselves. Knowing what makes our colleagues unhappy helps us to understand them.
Conflict enhances personal development. Managers find out how their style affects their
subordinates through conflict. Workers learn what technical and interpersonal skills they
need to upgrade themselves.
Conflict encourages psychological development—it helps people become more accurate
and realistic in their self-appraisals. Through conflict, people take others’ perspectives and
become less egocentric. Conflict helps people believe they are powerful and capable of
controlling their own lives. They do not simply need to endure hostility and frustration but
can act to improve their lives.
Conflict can be stimulating and fun. People feel aroused, involved, and alive in conflict,
and it can be a welcome break from an easygoing pace. It invites employees to take another look and to appreciate the intricacies of their relationships.
Source: Reprinted from Dean Tjosvold, Working Together to Get Things Done: Managing for Organizational Productivity,
Lanham, MD: Lexington Books.
Factors That Make Conflict Easy or Difficult to Manage
Figure 1.2 presents a conflict diagnostic model. This model offers some useful dimensions
for analyzing any dispute and determining how easy or difficult it will be to resolve. Conflicts with more of the characteristics in the “difficult to resolve” column will be harder to
settle, while those that have more characteristics in the “easy to resolve” column will be
settled quicker.
Effective Conflict Management
Many frameworks for managing conflict have been suggested, and inventories have been
constructed to measure negotiator tendencies to use these approaches.14 Each approach
begins with a similar two-dimensional framework and then applies different labels and descriptions to five key points. We will describe these points using the framework proposed
by Dean Pruitt, Jeffrey Rubin, and S. H. Kim (1994).
The two-dimensional framework presented in Figure 1.3 is called the dual concerns
model. The model postulates that people in conflict have two independent types of concern:
concern about their own outcomes (shown on the horizontal dimension of the figure) and
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Matter of “principle”—values, ethics,
or precedent a key part of the issue
Large—big consequences
Zero sum—what one wins, the other loses
Single transaction—no past or future
Disorganized—uncohesive, weak leadership
No neutral third party available
Unbalanced—one party feels more harm and
will want revenge and retribution whereas
stronger party wants to maintain control
Issue in question
Size of stakes—magnitude of what can be
won or lost
Interdependence of the parties—degree to
which one’s outcomes determine other’s
outcomes
Continuity of interaction—will they be
working together in the future?
Structure of the parties—how cohesive,
organized they are as a group
Involvement of third parties—can others
get involved to help resolve the dispute?
Perceived progress of the conflict—balanced
(equal gains and equal harm) or
unbalanced (unequal gain, unequal harm)
Balanced—both parties suffer equal harm
and equal gain; both may be more willing
to call it a “draw”
Trusted, powerful, prestigious third party
available
Organized—cohesive, strong leadership
Long-term relationship—expected
interaction in the future
Positive sum—both believe that both can
do better than simply distributing current
outcomes
Small—little, insignificant consequences
Divisible issue—issue can be easily divided
into small parts, pieces, units
Easy to Resolve
Source: Reprinted from Leonard Greenhalgh, Managing Conflict, Sloan Management Review 27, no. 6 (1986), pp. 45–51.
Difficult to Resolve
Viewpoint Continuum
Dimension
FIGURE 1.2 | Conflict Diagnostic Model
24
Chapter 1 The Nature of Negotiation
Concern about other's outcomes
FIGURE 1.3 | The Dual Concerns Model
Yielding
Problem
solving
(Compromising)
Inaction
Contending
Concern about own outcomes
Source: Reprinted from Dean G. Pruitt, Jeffrey Z. Rubin, and Sung H. Kim, Social Conflict: Escalation, Stalemate,
and Settlement, 2nd ed., (New York: The McGraw-Hill Companies, 1994).
concern about the other’s outcomes (shown on the vertical dimension of the figure). These
concerns can be represented at any point from none (representing very low concern) to
high (representing very high concern). The vertical dimension is often referred to as the
cooperativeness dimension, and the horizontal dimension as the assertiveness dimension.
The stronger their concern for their own outcomes, the more likely people will be to pursue
strategies located on the right side of the figure, whereas the weaker their concern for their
own outcomes, the more likely they will be to pursue strategies located on the left side of
the figure. Similarly, the stronger their concern for permitting, encouraging, or even helping the other party achieve his or her outcomes, the more likely people will be to pursue
strategies located at the top of the figure, while the weaker their concern for the other
party’s outcomes, the more likely they will be to pursue strategies located at the bottom of
the figure.
Although we can theoretically identify an almost infinite number of points within the
two-dimensional space based on the level of concern for pursuing one’s own and the other’s
outcomes, five major strategies for conflict management have been commonly identified in
the dual concerns model:
1.
lew29449_ch01_001-033.indd 24
Contending (also called competing or dominating) is the strategy in the lower righthand corner. Actors pursuing the contending strategy pursue their own outcomes
strongly and show little concern for whether the other party obtains his or her desired
outcomes. As Pruitt and Rubin (1986) state, “[P]arties who employ this strategy
maintain their own aspirations and try to persuade the other party to yield”
(p. 25). Threats, punishment, intimidation, and unilateral action are consistent with a
contending approach.
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Effective Conflict Management
2.
3.
4.
5.
25
Yielding (also called accommodating or obliging) is the strategy in the upper lefthand corner. Actors pursuing the yielding strategy show little interest or concern in
whether they attain their own outcomes, but they are quite interested in whether the
other party attains his or her outcomes. Yielding involves lowering one’s own aspirations to “let the other win” and gain what he or she wants. Yielding may seem like a
strange strategy to some, but it has its definite advantages in some situations.
Inaction (also called avoiding) is the strategy in the lower left-hand corner. Actors
pursuing the inaction strategy show little interest in whether they attain their own
outcomes, as well as little concern about whether the other party obtains his or her
outcomes. Inaction is often synonymous with withdrawal or passivity; the party prefers to retreat, be silent, or do nothing.
Problem solving (also called collaborating or integrating) is the strategy in the upper
right-hand corner. Actors pursuing the problem-solving strategy show high concern
for attaining their own outcomes and high concern for whether the other party attains
his or her outcomes. In problem solving, the two parties actively pursue approaches
to maximize their joint outcome from the conflict.
Compromising is the strategy located in the middle of Figure 1.3. As a conflict management strategy, it represents a moderate effort to pursue one’s own outcomes and a
moderate effort to help the other party achieve his or her outcomes. Pruitt and Rubin
(1986) do not identify compromising as a viable strategy; they see it “as arising from
one of two sources—either lazy problem solving involving a half-hearted attempt to
© Jack Ziegler / The New Yorker Collection / www.cartoonbank.com
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Chapter 1 The Nature of Negotiation
satisfy the two parties’ interests, or simple yielding by both parties” (p. 29). However, because many other scholars who use versions of this model (see endnote 13)
believe that compromising represents a valid strategic approach to conflict, rather
than as laziness or a cop-out, we have inserted it in Pruitt, Rubin, and Kim’s framework in Figure 1.3.
Much of the early writing about conflict management strategies—particularly the work in
the 1960s and 1970s—had a strong normative value bias against conflict and toward cooperation (Lewicki, Weiss, and Lewin, 1992). Although these models suggested the viability
of all five strategic approaches to managing conflict, problem solving was identified as
the distinctly preferred approach. Those writings stressed the virtues of problem solving,
advocated using it, and described how it could be pursued in almost any conflict. However,
more recent writing, although still strongly committed to problem solving, has been careful
to stress that each conflict management strategy has its own distinct advantages and disadvantages and can be more or less appropriate to use given the type of interdependence and
conflict context (see Figure 1.4).
Overview of the Chapters in This Book
The book is organized into seven sections with 20 chapters, which can be viewed schematically in Figure 1.5. Section 1, Negotiation Fundamentals, contains five chapters, including
this introductory chapter, and examines the basic processes of negotiation. In Section 2,
Negotiation Subprocesses, four chapters examine the key subprocesses of negotiation that
explain why negotiations unfold as they do. Section 3, Negotiation Contexts, contains four
chapters that place negotiations in a broader social context of multiple parties playing
many different roles. Section 4, Individual Differences, contains two chapters that address
the many ways individuals differ in their approach to negotiation as a result of their gender
and personality. Section 5 on Negotiation across Cultures contains a single chapter, addressing the interesting questions of how negotiation processes change as we move from
a Western view to other national or cultural backgrounds. In the three chapters of Section
6 about Resolving Differences, we explore ways that negotiators can move past impasse,
deadlock, and mismatches in their negotiation styles—either on their own initiative or with
the help of a third party. Finally, the book concludes with Section 7, Concluding Remarks,
in which we offer 10 summary comments and observations about the wealth of material
contained herein.
In the next two chapters (2 and 3), we describe the two fundamental strategies of negotiation: distributive and integrative. Chapter 2 describes and evaluates the strategies and
tactics that characterize the competitive (win–lose) distributive bargaining process. This
chapter reviews the tactics most commonly associated with distributive bargaining and
evaluates the consequences of using them. The chapter concludes with a section on how
to close negotiations, an aspect that many negotiators neglect in their preparation process.
Chapter 3 describes and evaluates the basic strategies and tactics common to the cooperative (win–win) integrative bargaining process. Integrative negotiation is significantly
different from distributive bargaining. Whereas distributive bargaining is often characterized by mistrust and suspicion and by strategies designed to beat the other party, integrative
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Overview of the Chapters in This Book
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FIGURE 1.4 | Styles of Handling Interpersonal Conflict and Situations where They Are Appropriate
or Inappropriate
Conflict Style
Situations Where Appropriate
Situations Where Inappropriate
Integrating
1. Issues are complex.
2. Synthesis of ideas is needed to come up
with better solutions.
3. Commitment is needed from other parties
for successful implementation.
4. Time is available for problem solving.
5. One party alone cannot solve the problem.
6. Resources possessed by different parties are needed to solve their common
problems.
1. Task or problem is simple.
2. Immediate decision is required.
3. Other parties are unconcerned about
outcome.
4. Other parties do not have problemsolving skills.
Obliging
1. You believe you may be wrong.
2. Issue is more important to the other party.
3. You are willing to give up something in exchange for something from the other party
in the future.
4. You are dealing from a position of
weakness.
5. Preserving relationship is important.
1. Issue is important to you.
2. You believe you are right.
3. The other party is wrong or unethical.
Dominating
1. Issue is trivial.
2. Speedy decision is needed.
3. Unpopular course of action is implemented.
4. Necessary to overcome assertive
subordinates.
5. Unfavorable decision by the other party
may be costly to you.
6. Subordinates lack expertise to make technical decisions.
7. Issue is important to you.
1. Issue is complex.
2. Issue is not important to you.
3. Both parties are equally powerful.
4. Decision does not have to be made
quickly.
5. Subordinates possess high degree of
competence.
Avoiding
1. Issue is trivial.
2. Potential dysfunctional effect of confronting the other party outweighs benefits of
resolution.
3. Cooling off period is needed.
1. Issue is important to you.
2. It is your responsibility to make decision.
3. Parties are unwilling to defer; issue must
be resolved.
4. Prompt attention is needed.
Compromising
1. Goals of parties are mutually exclusive.
2. Parties are equally powerful.
3. Consensus cannot be reached.
4. Integrating or dominating style is not
successful.
5. Temporary solution to a complex problem
is needed.
1. One party is more powerful.
2. Problem is complex enough to need a
problem-solving approach.
Source: Modified from M. Afzalur Rahim, Rahim Organizational Conflict Inventories: Professional Manual, (Palo Alto, CA: Consulting
Press Psychologists, 1990).
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Chapter 1 The Nature of Negotiation
FIGURE 1.5 | Schematic Overview of Chapters in This Book
Section 1: Negotiation Fundamentals
1. The Nature of Negotiation
2. Strategy and Tactics of Distributive Bargaining
3. Strategy and Tactics of Integrative Negotiation
4. Negotiation: Strategy and Planning
5. Ethics in Negotiation
Section 2: Negotiation Subprocesses
6. Perception, Cognition, and Emotion
7. Communication
8. Finding and Using Negotiation Power
9. Influence
Section 3: Negotiation Contexts
10. Relationships in Negotiation
11. Agents, Constituencies, Audiences
12. Coalitions
13. Multiple Parties, Groups, and Teams in Negotiation
Section 4: Individual Differences
14. Individual Differences I: Gender and Negotiation
15. Individual Differences II: Personality and Abilities
Section 5: Negotiation across Cultures
16. International and Cross-Cultural Negotiation
Section 6: Resolving Differences
17. Managing Negotiation Impasses
18. Managing Difficult Negotiations
19. Third-Party Approaches to Managing Difficult Negotiations
Section 7: Concluding Comments
20. Best Practices in Negotiations
negotiation is characterized by trust and openness and by tactics designed to achieve the
best possible solution for all parties involved. Integrative negotiation often resembles the
process of problem solving.
The Negotiation Fundamentals section continues with Chapter 4, in which we discuss
how negotiators should create strategies and plans to achieve their desired outcomes. This
chapter first examines the broad nature and role of strategy. We present a general model
of strategic choice and identify the key factors that affect how a strategy is designed. We
then move to the more specific elements of effective planning for negotiation. Planning
and preparation are the most important steps in negotiation, yet many negotiators neglect
or even completely ignore them. Effective planning requires (1) a thorough understanding
of the negotiation process so the negotiator has a general idea of what will happen and how
things will evolve; (2) a clear formulation of goals and aspirations; (3) research—gathering
information and arguments to support and defend desired goals; and (4) knowledge of the
other party, his or her goals, and the ability to use that knowledge to design a strategy to
reach an effective resolution. The chapter includes a series of diagnostic questions negotiators may use in planning for any negotiation.
Finally, in Chapter 5, we explore the question of whether there are, or should be,
accepted ethical standards for behavior in negotiations. It is our view that fundamental
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questions of ethical conduct arise in every negotiation. The effective negotiator must recognize when the questions are relevant and what factors must be considered to answer them.
We will identify the major ethical dimensions raised in negotiations, describe how people
tend to think about these ethical choices, and provide a framework for making informed
ethical decisions. Along the way, we will highlight research that has yielded worthwhile
findings in this area.
Section 2, Negotiation Subprocesses, has four chapters. Chapter 6 addresses how perception, cognition, and emotion shape the data we receive and process about the issues,
other parties, and negotiation dynamics. Perception, cognition, and emotion are the basic
building blocks of all social encounters in the sense that our social actions are guided by
how we perceive and analyze the other party, the situation, and our own interests and positions. A working knowledge of how humans perceive and process information is important
to understanding why people behave the way they do during negotiations. Moreover, we
experience and express emotion when we interact with others, and negotiating is certainly
no exception. The chapter explores the role of emotion and moods in shaping negotiation
dynamics.
Reduced to its essence, negotiation is a form of interpersonal communication. Communication processes, both verbal and nonverbal, are critical to achieving negotiation goals
and to resolving conflicts. Chapter 7 examines the process by which negotiators communicate their own interests, positions, and goals—and in turn make sense of those of the other
party and of the negotiation as a whole. This chapter opens with a discussion of the basic
mechanisms through which messages are encoded, sent, received, and decoded. It then
considers in some depth what is communicated in a negotiation, followed by an exploration
of how people communicate in negotiation; the chapter concludes with discussions of how
to improve communication in negotiation.
Chapter 8 focuses on power in negotiation. By power, we mean the capabilities negotiators can assemble to give themselves an advantage or increase the probability of achieving their objectives. All negotiators want power; they want to know what they can do to
put pressure on the other party, persuade the other to see things their way, get the other to
give them what they want, get one up on the other, or change the other’s mind. The chapter
begins by defining the nature of power and discussing some of the dynamics of its use
in negotiation. It focuses on the power sources that give negotiators the capacity to exert
influence.
Chapter 9 examines the way negotiators actually exert influence—the actual strategies and messages that individuals deploy to bring about desired attitudinal or behavioral
change. During negotiations, actors frequently need to convince the other party they have
offered something of value, that their offer is reasonable, and that they cannot offer more.
Negotiators may also want to alter the other party’s beliefs about the importance of his own
objectives and convince him that his concessions are not as valuable as he first believed.
Negotiators may portray themselves as likable people who should be treated decently. All
these efforts are designed to use information, as well as the qualities of the sender and receiver of that information, to adjust the other party’s positions, perceptions, and opinions.
The chapters in Section 3, Negotiation Contexts, examine ways the broader social environment shapes negotiation processes. One major way that context affects negotiation is
that people are in relationships that have a past, present, and future. In Chapter 10, we focus
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Chapter 1 The Nature of Negotiation
on the ways these past and future relationships impact present negotiations. Our treatment
of relationships will come in two major sections. First, we examine how a past, ongoing, or
future relationship between negotiators affects the negotiation process. Second, we look at
three major themes—reputations, trust, and justice—that are particularly critical to effective negotiations within a relationship.
In Chapter 11, we explore how negotiation changes when (1) we move beyond simple
1:1 negotiations and add other parties to the process, and (2) when negotiators act as agents
in the process—that is, they are not necessarily presenting their own issues and interests,
but are also representing the views of others who may or may not be at the table. This situation is called an agency relationship. We examine the ways negotiations change when negotiators are representing the interests of others rather than arguing for their own interests.
Within this larger context, individuals and groups attempt to exert both direct and indirect
pressures on negotiators to advocate their interests. We examine the type of influence strategies negotiators use and the different types of influence attempts that occur as the number
of parties increases. We conclude with a section on how constituencies can manage agents,
and how agents can manage constituencies.
In Chapter 12, our focus is on situations in which multiple (more than two) parties are
negotiating with one another—in essence, how parties ally into coalitions to achieve these
objectives. We present an overview of what a coalition is and describe the different forms
that coalitions take. We then analyze how and why coalitions form and develop, the nature
of coalition decision-making, and the role of power and leverage in coalitions. The chapter
concludes with some practical advice for building and maintaining coalitions.
Finally, in Chapter 13, we extend the analysis to two situations that involve multiple
parties. In one situation, multiple parties are negotiating with one another and attempting
to achieve a collective or group consensus. We discuss this kind of team or group decision
making as a process of multiparty negotiation. In the second situation, multiple individuals
are present on each “side” of the negotiation—in other words, the parties to a negotiation
are teams against teams, rather than individuals.
The two chapters in Section 4, Individual Differences, examine the way individual
differences shape the approaches people take in negotiation. Some people are better negotiators than others. What characteristics of individuals make a difference in negotiation?
In Chapter 14, we focus exclusively on the individual difference that has received more
attention from negotiation researchers than any other: gender differences. Our examination
of gender differences, which some might prefer to call sex differences, will begin by distinguishing between the terms sex and gender. We then examine research on gender differences
in negotiation. We look at both the rationale for why there should be gender differences and
the empirical research evidence for them. Some exciting new research developments in this
area have occurred in the last few years, giving us a clearer picture of the underlying psychology of gender in negotiation.
In Chapter 15 we examine a range of other individual difference factors, including personality traits and abilities. We begin with a brief review of early research on individual differences. We then focus on more recent research on individual differences and negotiation,
segmenting our discussion into two major categories: (1) dimensions of personality that
appear to have an influence on negotiation and (2) the role of native abilities in negotiation,
including cognitive ability and the relatively new domain of emotional intelligence. The
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31
chapter then concludes with a discussion of the behavioral approach to studying individual
differences in negotiations, which explores how superior negotiators behave differently
from average negotiators.
Section 5, Negotiation across Cultures, contains only a single chapter, but it is an
important one: International and Cross-Cultural Negotiation. People today travel more frequently and farther, and business is more international in scope and extent than ever before.
For many people and organizations, international negotiation has become the norm rather
than an exotic activity that only occasionally occurs. Negotiation increases significantly
in complexity as parties move across national and cultural boundaries. This chapter discusses some of the factors that make international negotiation different, including both the
environmental context (macropolitical factors) and the immediate context (microstrategic
factors). We then turn to a discussion of the most frequently studied aspect of international
negotiation: the effect of culture, be it national, regional, or organizational. Next we examine the influence of culture on negotiations, discussing this from managerial and research
perspectives. The chapter concludes with a discussion of culturally responsive strategies
available to the international negotiator.
Section 6 of the text, Resolving Differences, examines ways that parties can deal with
failures to complete negotiation successfully. Negotiations break down and stall for many
reasons. In Chapter 17, we address situations in which negotiations become especially difficult, often to the point of impasse, stalemate, or breakdown. Parties can become angry
or entrenched in their positions. Perceptions become distorted, and judgments are biased.
The parties stop communicating effectively and instead accuse and blame each other. The
chapter examines the nature of those negotiations that are difficult to resolve. We examine
the nature of impasses and what makes negotiations intractable. We then explore the fundamental mistakes that negotiators make that cause negotiation impasses, and we discuss
strategies that negotiators can use to resolve impasses and get negotiations back on track.
In Chapter 18, we turn to situations in which parties are using different models to
guide their negotiation, either because they have diagnosed the situation differently or they
possess different levels of negotiation sophistication, or simply from habit. We direct our
discussion and advice to negotiators who wish to be collaborative but find they must deal
with others who are reluctant to do so—who wish, intend, or are actively trying to be distributive. We call them “difficult” people. There are several challenges to negotiators who
want to convert a distributive bargainer toward a more collaborative approach. We begin
by discussing ways to manage the social contract and the shadow negotiation. Next, we
turn to a discussion of how to respond to the other party’s hard distributive tactics, which
is followed by a discussion of the options available to negotiators who are faced with another party who is more powerful. We then discuss possible tactics to use with generally
difficult negotiators, examine how to respond to ultimatums, and conclude the chapter with
a discussion of how to manage difficult conversations.
Finally, in Chapter 19, we discuss the many ways that third parties can help negotiators
resolve their differences. There is a long history of third-party involvement in helping parties resolve disputes or reaching a decision for them when they cannot. Third parties tend to
become involved when negotiators have tried all other options and are not making progress,
when mistrust and suspicion are high, or when the parties cannot take actions toward defusing conflict without those actions being misinterpreted and mistrusted by others. In this
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Chapter 1 The Nature of Negotiation
chapter, we describe the typical roles that third parties play and how they can contribute
to resolving conflict. This is followed by an examination of the types of third-party interventions, with special attention paid to three formal third-party roles: arbitration, mediation, and process consultation. We then discuss informal third parties, and we conclude the
chapter with an examination of the institutionalization of third-party processes through the
establishment and maintenance of alternative dispute resolution (ADR) systems.
Section 7 contains the last chapter in the book, Concluding Comments. In this final
chapter (20), we reflect on negotiation at a broad level. Negotiation is an integral part of
daily life and the opportunities to negotiate surround us. While some people may look like
born negotiators, negotiation is fundamentally a skill involving analysis and communication that everyone can learn. In this final chapter, we look back at the broad perspective
we have provided and provide 10 “best practices” for negotiators who wish to continue to
improve their negotiation skills.
Chapter Summary
In this chapter, we have set the groundwork for a thorough and detailed examination of the negotiation process. We began with examples—examples from the
news of events around the world and examples from
our everyday experience. We used these examples to introduce the variety of negotiations that occur daily and
to discuss how we will present material in this book.
We then turned to the extended example of a day in
the life of Joe and Sue Carter and showed how negotiations permeate daily experience. We also used this
example to help define the key parameters of a negotiation situation.
Our definition and these examples lead us to explore four key elements of the negotiation process: managing interdependence, engaging in mutual adjustment,
creating or claiming value, and managing conflict. Each
of these elements is foundational to understanding how
negotiation works. Managing interdependence is about
the parties understanding the ways they are dependent
on each other for attaining their goals and objectives.
Mutual adjustment introduces the ways parties begin to
set goals for themselves in a negotiation and adjust to
goals stated by the other party in order to emerge with
an agreement that is satisfactory to both. Claiming or
creating value are the processes by which parties handle
negotiation opportunities to share or “win” a scarce resource or to enhance the resource so both sides can gain.
Finally, managing conflict helps negotiators understand
how conflict is functional and dysfunctional. It involves
some basic strategies to maximize the benefits of conflict and limit its costs. These four processes are central
to any negotiation, and they serve as the foundation for
our expanded treatment of this subject.
In the remainder of this chapter, we provided an
overview of our broader approach by introducing the
overall organization and chapters in the book.
Endnotes
1
E.g., Hochberg and Kressel, 1996; Oliver, Balakrishnan,
and Barry, 1994; Olekalns, Smith, and Walsh, 1996;
Weiss, 1997.
2
See Bazerman, Tenbrunsel, and Wade-Benzoni (1998) on the
challenges of negotiating with yourself.
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3
But as we will extensively note in Chapter 2, at this point, the
student is only considering his own BATNA. He may not
know that the employer believes the student absolutely fits
the job description perfectly, hasn’t found another candidate
with the same qualifications, and might be willing to pay a
lot more just to make sure the student doesn’t say “no.”
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Endnotes
4
Goffman, 1969; Pruitt and Rubin, 1986; Raven and Rubin,
1976; Ritov, 1996.
5
Alexander, Schul, and Babakus, 1991; Donohue
and Roberto, 1996; Eyuboglu and Buja, 1993;
Pinkley and Northcraft, 1994.
6
Gray, 1994; Kolb, 1985; Kolb and Putnam, 1997.
7
Fisher, Ury, and Patton, 1991; Follett, 1940; Nash, 1950;
Sebenius, 1992; Sen, 1970; Walton and McKersie, 1965.
8
We are not suggesting that Max should do this; rather, because the long-term relationship is important in this situation, Max should ensure that both parties’ needs are met
(see Chapter 3 for an expanded discussion of this point).
9
33
10
Raiffa, 1982; Selekman, Fuller, Kennedy, and Baitsel, 1964.
11
Bazerman, Magliozzi, and Neale, 1985; Neale and
Bazerman, 1985; Neale and Northcraft, 1991; Pinkley,
1992; Thompson, 1990b.
12
Folger, Poole, and Stutman, 1993; Hocker
and Wilmot, 1985.
13
As mentioned earlier, however, the goals may not actually be in opposition, and the parties need not compete.
Perception is more determinant than reality.
14
Filley, 1975; Hall, 1969; Rahim, 1983, 1992; Thomas, 1992;
Thomas and Kilmann, 1974.
Kimmel, Pruitt, Magenau, Konar-Goldband, and Carnevale,
1980; Putnam and Jones, 1982; Weingart, Thompson,
Bazerman, and Carroll, 1990.
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